How could they possibly have that data though? They haven’t tested different prices. They didn’t have a chance to attain the data.
Sure, there are different priced items in the store, but they aren’t comparable. The $20 bundles have all typically offered something more than the $10 bundles. They usually offer an armor set, numerous armor coatings and other goodies, or armor effects. Those sort of bundles have only been tested at the $20 price point, so they literally could not have attained data for those bundles at different prices.
Halo Infinite are in line with every major cosmetic store I have seen. And based on frequency in game, it’s hard to believe that they aren’t “flying off the shelves”.
They aren’t in line with bundles I’ve seen in other games. Like in CoD a $20 bundle will get you a completely new skin, several new guns models, maybe a charm or two, and some emblems. In Halo just the skin would be $20. I don’t find them comparable. The prices maybe, but not what they’re offering for the price. And the skins in CoD are a lot more varied.
But I do agree, I feel that digital storefronts could do a much better job playing with the price point to see if they can maximize sales. Ideally, even if it means a profit loss.
That’s basically my point. They need to test more to see if they’ve optimized things. They just took price points from other games, and even though they’re not offering similar content, and this is a different game, they’re acting like these prices will be the best they can be. And frankly, I have my doubts their first price point was anywhere close to the max.
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Apologies, I meant comparable in price. Not in value.
And by data, I mean they have their sales figures. And based on that alone they can get a good idea of performance. So for instance, if the $8 bundles have a 25% attach rate, and the $18 bundles have a 5% attach rate, that is a very good indicator that the $18 bundle is priced way too high.
Similarly, if the $8 bundle has a 25% attach rate, and they want to have closer to a 50%, they would have to adjust the price.
And I agree, they aren’t in line with bundles in other games. Which is why there is so much valid criticism surrounding it.
And what you are suggesting is what I’m guessing will happen. It’s pretty clear that the community isn’t happy. So once 343 gets back to the grindstone, and some internal analysis is done, I fully expect to see a relatively significant rework to their pricing structure, and what is included.
At least I hope so. Because as much as I would like to think that our voices will be heard, the $20 packs are so dang common, that I can’t help but feel that they are selling incredibly well.
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Well sure they have numbers regarding percentage of people buying, but profits are harder to calculate than just that. And since the $20 and $10 bundles are qualitatively different, we don’t know exactly how the sales of the $10 bundles mirror the sales of the $20 bundles. And we have no idea of locally if a small increase or decrease in either bundle would increase or decrease revenue. Would the revenue function for the $20 type bundles be increasing at its current price point? That type of localized data would be impossible to attain with the data. Sure, they aren’t totally blind, but they do need more info.
I hope so too. I really do.
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You would be surprised on how well these calculations can be done. It’s not my field but I’ve seen insane data on it. Like how Walmart can lower their price on some item by $0.05, and with a fair degree of accuracy be able to determine how that would impact their bottom line.
Now sure, a real world test could lead to unexpected results, but generally speaking they have all the data they would need to decide if they want to raise or lower their prices. And any risk associated. Because like you said, reducing the $20 price down to $10 could cause more sales, but far less revenue/profit.
Which goes back to the fear. If 343 and MS are happy with the current sales figures that they see based on attach rate, it’s unlikely that we are going to see much playing around.
EDIT: An example that is comparable here is when services change their price point (say Netflix). These decisions have mountains of research and analysis that drive them. And generally speaking, they have a surprisingly good idea what those price changes will lead to in terms of dropped subs and revenue change. And these are often changes by just a few dollars. And these kinds of data points are constantly being analyzed. Netflix has data that gives them a good idea on how much more/less they can reasonably expect to lose or gain by shifting their price up or down even by small amounts.
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It’s not my field but I’ve seen insane data on it. Like how Walmart can lower their price on some item by $0.05, and with a fair degree of accuracy be able to determine how that would impact their bottom line.
I’m a PhD candidate in mathematics, and that doesn’t surprise me too much. A small change like that can give you a pretty good idea of what the first derivative was at that price point. So you have two of your initial conditions. That’s a fairly amount of info. Even more if you test a price increase in the other direction as well. Plus, they’re are years and years of data on similar items for physical things. Like, how long have they been selling socks? They aren’t just using info from current sock sales. But Halo Infinite doesn’t have years of data of what Halo fans will pay. And they haven’t even tested a 5 cent change in price for the $20 type bundles.
Also, another reason why the strict percentages are enough, is because the same market is looking at the $20 bundles that is looking at the $10 model. And of they lowered the $20 to $15, then they’d sell more of the $20 type bundles (now $15), but how much would that dip into the sales of the $10 type bundles. This is info they probably have some idea about, but having an idea is one thing, testing it is another. In science nothing is better than hard data.
Now I do agree with you that they probably don’t want to risk it if they’re happy with sales at the current price point. But a slight change in price likely won’t impact revenue too much, and it would give them an idea about how the function is changing locally. And that’s info they do not currently have.
And yeah, Netflix likely does have a good idea. But they have over a decade of Netflix sales. They’ve raised and lowered prices before. And they can compare to other streaming services, which actually do offer comparable content. We’ve established the content in the Infinite bundles isn’t comparable to the content in bundles in other games, so it’s harder for Microsoft and 343 to use that data with certainty than it would be for Netflix. All I’m saying is that they can’t truly optimize without more data. But like you pointed out, if they’re happy with sales they might not care about optimizing perfectly.
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Honestly it’s just disappointing that more games aren’t willing to play around with these values. ANd I’m just really hoping that 343 and MS will be willing to do just that. Since real world data is always > making predictions (no matter how well educated).
Personally, I’m also more in line with maximizing sales over profit. Even if it means less profit in the long run. Simply because Halo is a piece of entertainment. And if having 5x the amount of sales, but 75% the profit… I find that worth it. If I was running the business I would rather have a larger and happier user base, then a much smaller one.
And lets be real, this is a MS product. They can easily afford to eat even a 50% profit margin on DLC. Especially if it means making millions more consumers happy, with many repeat purchases. And if I was in charge, my goal would be to essentially make the Halo IP a “charity”. The idea of re-investing and making the business “break even”. Simply because doing so would bolster not only the franchise, but could work towards being a pillar and major advertisement piece for people to sub to things like Game Pass.
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I mean, I totally agree with that direction. This kind of reminds of how Microsoft used to treat Piracy, in that pirating their product was better than using someone else’s product, because it still helps build a user base. Which is the most important thing for long term. It’s especially important if Microsoft really wants to make this game last 10 years. That won’t happen if they just attract free to play players who will move onto the next Free to Play game in a year. Hopefully some of this thinking rubs off of them.
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